So you’ve decided to start a small business. You’ve got an idea, and you want to start working for yourself.
The first thing to do is ask yourself
– Do I want to be a sole proprietor or Incorporate? –
You may be looking at the screen right now saying, “What’s the difference?”
Well, a sole proprietorship is an unincorporated business solely owned by 1 person. This is generally good for a single operator that is looking to run a small business, perhaps part-time, that will have limited income. Registering a small business as a sole proprietorship is a good way to start while you are building cash-flow and customers, because it is inexpensive and easy to do. Simply go to a local Service Ontario office, which in our region is located in Whitby, and register the name for about $100. This gives you a business license, which then allows you to register for a bank account, etc. More information regarding a sole proprietorship can be found here: http://www.registerbusinessinontario.com/register-a-sole-proprietorship.html
– What are the benefits of a corporate entity ? –
A Corporation is a separate corporate entity that is a better solution for people wanting to start a business that is a full time, with expected revenue larger than $30K per year. Incorporating your business offers some protection to the partners or owner of the company as well as allows you to operate in certain fields and apply for grants, etc. The cost is higher than a sole proprietorship, however, in the long run, it makes more sense. More information regarding incorporating can be found here: http://www.bdc-canada.com/BDC/Corporate/Corporate_ON.htm#learn-more
– Do I need a business plan? –
The second activity should be writing a business plan. There are many templates available online that can assist, but the most important part of the plan is to do the following:
- Determine your product or service.
- Identify your target customer.
- Research your competitors in the marketplace.
- Find out how to market to, and acquire, new customers.
- Create a realistic cash-flow projection, comparative to your costs, to determine the viability of your business concept.
- Plan for growth by creating a realistic expansion plan..
There is far more parts to the plan, but these are very important. For more information regarding how to write a business plan, contact Drew@905business.com. I will be happy to send a template that is commonly used.
Finally, put your plan into action! Whether it’s starting something part-time with the eventual plan of going full-time, or you are starting something whole hog, hard work, diligence, and proper planning will help you to succeed! Good luck!
Check out some of these great websites to learn more: